District Court Issues Opinion Pertaining to Punitive Damages and Discovery

On July 22, 2008, U.S. District Judge James M. Munley of the Middle District of Pennsylvania issued an opinion in Grosek v. Pather Transportation, Inc. requiring the Defendant to produce documents related to punitive damages in the discovery phase of litigation before a determination was made that punitive damages are warranted.

In Grosek, The Defendants sought a Protective Order pursuant to Federal Rule of Civil Procedure 26(c) which would have prevented Plaintiff from conducting any discovery on the Plaintiffs’ financial condition until a jury concluded that punitive damages are warranted in the case. Defendants also argued that their financial condition cannot be relevant until a determination has been made that punitive damages are appropriate.

In declining to issue the Protective Order, the Court reasoned that “Defendants have demonstrated no prejudice which would occur from allowing discovery” and also noted that “the weight of authority requires a Defendant to disclose his financial condition in pretrial discovery when punitive damages are required.” The Court distinguished those cases cited by Defendants on the basis that they stand for the proposition that discovery is not permitted in determining whether a defendant has the means to satisfy a judgment. The Court also directed the parties to enter into a confidentiality agreement which would protect the disclosure of the financial condition of Defendants.